Virgin Media 2008 Annual Report Download - page 194

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10—Derivative Financial Instruments and Hedging Activities (Continued)
The foreign exchange risks relating to the $550 million 9.125% senior notes due 2016, the
A225 million senior notes due 2014 and the $531.9 million and A423.9 million principal obligations
under the senior credit facility is being mitigated through the use of cross-currency interest rate swaps,
some of which qualify as accounting hedges and some of which do not.
Note 11—Employee Benefit Plans
Defined Benefit Plans
Certain of our subsidiaries operate defined benefit pension plans in the U.K. The assets of the
plans are held separately from those of ourselves and are invested in specialized portfolios under the
management of investment groups. The pension cost is calculated using the projected unit method. Our
policy is to fund amounts to the defined benefit plans necessary to comply with the funding
requirements as prescribed by the laws and regulations in the U.K. Our defined benefit pension plans
use a measurement date of December 31.
In June 2007, Virgin Media effected a merger of two of our defined benefit plans with a smaller
plan in respect of NTL Glasgow, a wholly owned subsidiary of Virgin Media but not a subsidiary of
ours (the merged plan). The merger of these plans was subject to the approval of the trustees and, as a
condition of trustee approval, Virgin Media agreed to make a specific one-time contribution of
£4.5 million. Following the merger, we have two defined benefit plans, the merged plan and the main
plan, and the information set out in the following tables and disclosure includes amounts in respect of
these two plans in total since substantially all of the plan assets and obligations relate to our current
and former employees.
We adopted the provisions of Statement of Financial Accounting Standards No. 158, Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R), or FAS 158, as of December 31, 2006. The table below
summarizes the incremental effects of the FAS 158 adoption on the individual line items in our balance
sheet at December 31, 2006 (in millions):
Pre FAS 158 FAS 158 Post FAS 158
Adoption Adjustment Adoption
Deferred revenue and other long term liabilities ............. £32.3 £9.4 £41.7
Accumulated other comprehensive income ................. 10.6 9.4 20.0
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